Torrent Pharmaceuticals Ltd Quarterly Results Q1 FY 26 stock analysis

Home » Core Investor Group » Torrent Pharma Ltd – Q1FY26 Result Update

Sector Outlook: Positive

Strong performance to continue across key markets

Torrent Pharma reported a revenue growth of 11.2% YoY / up 7.4% QoQ to Rs. 31,780 mn and was above market expectations of Rs. 30,890 mn. Domestic revenue grew 10.8% YoY, led by outperformance in focus therapies. The company expects the Indian business to continue outperforming market growth. As per AIOCD secondary data, the company grew above IPM, with the company’s chronic business growth of 13% YoY vs IPM growth of 9% YoY due to restructuring and divisional expansion. The US business also increased by 18.9% during the quarter, with growth aided from increased purchasing on existing contracts and achieving targeted market shares in recent launches. German sales grew by 8.5%, while growth for Germany (in EUR terms) was 1%, mainly due to supply disruptions at a third-party supplier this quarter. In addition, Brazil sales increased 1.2% YoY, led by the performance of top brands & new launches. EBITDA increased 14.2% YoY / up 7.1% QoQ to Rs. 10,320 mn, while EBITDA margin stood at 32.5% (up 85bps YoY / down 11bps QoQ) in Q1FY26, after factoring out one-off acquisition-related expenses of Rs. 150 mn. Profit after Tax stood at Rs. 5,480 mn (up 19.9% YoY / up 10.0% QoQ) in Q1FY26. The PAT margin was 17.2% versus 16.8% in the previous quarter.

Key Concall Highlights

Torrent Pharmaceuticals remains optimistic about sustaining its market outperformance, particularly in its India business, which grew ahead of the Indian Pharmaceutical Market (IPM) in Q1FY26. The company’s chronic portfolio grew 13%, outperforming the IPM’s 9%, driven by strong traction in cardiac, diabetes, gastro, and CNS therapies, as well as the consumer health segment, notably the Curatio portfolio. To strengthen regional penetration and support new product launches, Torrent is expanding its field force, targeting approximately 7,000 medical representatives (MRs) by the end of FY26, up from 6,600 in Q1FY26. Despite higher associated costs, margins have improved due to efficient scaling, reinforcing management’s confidence in sustained growth.

Torrent is also advancing its pipeline, with active development of oral and injectable formulations of Semaglutide for both the Indian and Brazilian markets. Phase 3 trials for the oral version are underway in India, while the injectable version is progressing through a strategic partnership. These are expected to significantly contribute to Torrent’s chronic portfolio within the next 1–2 years.

In the US market, Torrent anticipates gradual recovery, with modest growth in FY26 and stronger traction from FY27 onward. The company launched 4–5 products in Q1 and expects around 10 launches for the year. While competition remains intense, Torrent is building a sustainable US portfolio with a long-term view.

The Brazilian business continues to be a major growth driver, delivering double-digit growth in Q1FY26, well above the market’s 5% growth as per IQVIA. With a robust pipeline of 62 molecules awaiting ANVISA approval, Torrent aims for 8–10 product launches annually across divisions. Despite occasional inventory-led market volatility, management remains confident, tracking IQVIA data for true demand insights.

However, the German business faces near-term challenges due to supply disruptions at a key third-party partner, affecting a portfolio that is 75% externally sourced. Torrent is actively working on alternative sourcing and in-house production to stabilize supply. Although normalization may take a few quarters, the company remains committed to Germany, where it holds a 6% market share and ranks as the fifth-largest generic player, with a continued focus on cost optimization and portfolio expansion.

Valuation and Outlook

Torrent Pharma continues to deliver strong revenue growth and remains well-positioned for sustained performance across key markets, driven by robust execution in branded generics and chronic therapies. Despite higher R&D and reinvestment plans, management expects margins to stay stable through FY26. The India business is expected to continue outperforming industry growth, aided by field force expansion, strong traction in chronic and consumer health segments, and new product launches. This expansion will help provide a platform for new launches, increase territorial reach, and gain regional market share in previously untapped areas. The Brazil business is also poised for steady growth, with 8–10 annual launches and a rich pipeline of 62 molecules. Meanwhile, the US business is on a gradual recovery path, experiencing increased traction from recent and upcoming launches, although it remains loss-making at the post-R&D level. The German business faces near-term headwinds due to supply disruptions. The integration of JB Pharma is progressing as planned and could unlock synergies in the medium term. Overall, Torrent Pharma is well-positioned for sustained growth, margin stability, and improved profitability across key markets.